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Martin Wheatley: What the FCA can learn from the Tour de France

Martin Wheatley 2013 700x450
Financial Conduct Authority chief executive Martin Wheatley

Financial Conduct Authority chief executive Martin Wheatley says there are lessons to be learnt from how cycling regulators have dealt with Tour de France doping scandals.

Writing in City AM today, Wheatley compared cycling’s drug scandals, most notably seven-time winner Lance Armstrong being stripped of his titles last year, with financial services’ misconduct.

Last night British cyclist Chris Froome became the second Briton in successive years to win the Tour de France.

Wheatley said: “We can use the Union Cycliste Internationale as an analogy for the British financial regulatory system. The teams are like regulated financial firms, with shareholders as well as managers. The riders are the products, from plain vanilla, off-the-shelf items to star asset managers.

“The spectators are like financial consumers. They reward sponsoring firms by purchasing their products. They will walk away if they suspect they are watching cheats. Prizes are like bonuses and rival teams provide incentives to compete, including the possibility of better-paid jobs.

“We know there are the incentives to cheat, especially for teams that are falling behind. So it can be difficult for individual teams who want to break free and do the right thing.

“These issues are rather familiar to regulators of retail financial conduct.”

Wheatley said that just as the UCI must invest in science to keep up with drug cheats, so the FCA must invest in the research of financial markets and products.

He also says the FCA will be “actively taking on” the medium and long-term nature of financial products but gave no further details the the approach that will be used. 

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Comments

There are 22 comments at the moment, we would love to hear your opinion too.

  1. Sorry Martin

    Financial services is nothing like the TDF

    Mr Froome doesn’t have to ride his push bike with his hands tied behind his back, having to navigate the roads with his chin !!!!

    Also these guys are given all the support they need to succeed.

    Go back to bed and count your money !!!!

  2. Is it just me or does there seem to be a weekly comment from this chap that is utterly drivel.
    If he wants to find out more, spend a few days at real IFA firms, talk to the IFA’s, get to know his customers and formulate some relevant regulation based on facts

  3. Cycling has cleaned up because the regulators took decisive action. Imagine the chaos that would still exist in cycling if the rules were unclear and open to a myriad of interpretations. There aren’t any rules that say ‘Only use suitable substances in your diet’ or ‘bikes must not exceed a reasonable weight’ or ‘no team assistance to close to the finish of the race’, etc., etc.

    Presumably then, the FCA will now move to a simple regime where the rules are clear and simple so that everyone knows what’s right and what’s wrong and where they stand.

    No, thought not…

  4. I know that this thread will descend quickly into a Wheatley bashing fest so to kick off, I find the thrust of his argument incoherent.

    Cyclist’s cheat to win but they have not committed a crime. Armstong may lose some lawsuits but he won’t go to jail because whilst what he is alleged to have done is distateful it’s not unlawful.

    If a financial adviser cheats he/she is a criminal and should be punished accordingly. What I think the adviser community feels aggrieved about regulation in the uk is that regulators appear to elide criminal behaviour and poor judgement/bad luck and the FSCS picks up the tab. Paid for by honest/low risk/lucky advisers alike.

    There appears to be much stick, very little carrot.

    How about rewarding good behaviour and practice rather than simply punishing miscreants?

  5. Paid £650k per annum to come up with rubbish like that. Is it me, or has the world finally gone mad?

  6. Correct DH
    FS is more akin to a gulag, where the FCA (the one which claims “we are not an aggressive regulator” is the taskmaster and the regulated are the inmates, afraid to look up or put a foot wrong, as the taskmasters have promised to shoot first and ask questions later.
    Be afraid, be very afraid.

  7. DH
    dont forget that if this i s FCA regulation, then the riders would also have to stop every 10k and write up why they cycled the speed they did, why they chose which part of the road they used, why they havent attempted a break away yet, why they chose the tyre pressures they are using, which replacement bikes they have ready for a puncture, why they discounted all the other biikes available, what impact their CO2 when breathing out has on the environment, what their plan is should a herd of cattle cross the road unexpectedly, how they will compensate any spectator who doesnt get a good view of them because they were riding too fast…and then should they finish the stage, they will have probably have to pay an unforseen levy to cover compensation for the ants they ran over en route.

  8. Compliance Bloke 22nd July 2013 at 10:35 am

    There is a lot to be said for this analogy, although Mr Weakley has misunderstood the UCI and, therefore, aligned himself with one of the worst regulatory bodies in the world

    In addition to DH’s comments (which I agree with), the UCI knew about the wide-spread doping that was rife in the sport but failed to do anything about it – KeyData, anyone?!

    UCI conspired with Armstrong, his team and his doctor (Michele Ferrari) to cover up failed tests – Arch cru, anyone?

    I could go on but, in essence, comparing UCI to FSA / FCA is spot on – they’re both pointless organisations who fail to deal with problems, even when they are pointed out to them time and time again.

    Rant over.

  9. “There aren’t any rules that say ‘Only use suitable substances in your diet’ or ‘bikes must not exceed a reasonable weight’ or ‘no team assistance to close to the finish of the race’, etc., etc.”

    Funny you should say that. There is a rule that bikes must not be /below/ a specified weight, and Contador was allegedly seen chucking his bike into a ravine and getting on a different one when a test was imminent. And then we have our own Chris Froome who did get assistance from his team too close to the finish – he was given a 20 second penalty, but if he hadn’t taken on fuel he would probably have lost two minutes and blown the race wide open.

    I get what you’re saying – those rules are exact whereas the FCA’s are vague. But an exact rule often gives as much opportunity for gaming the system as a vague one. If you want to relate this to financial services, I suppose that’s the theory behind principles-based regulation. And pension liberation schemes and the like are the Froomes and Contadors of the world, bending or deliberately breaking the rules because they know they either won’t be caught or the punishment won’t fit the crime.

  10. Is it just me or is Mr Wheatly already an irritating irrelevance?

    Clearly he is looking for bandwagon’s to jump onto but Rome is burning whilst his organisation fiddles with pointless PR guff.

  11. @ On your Bike
    Nice one – and sadly oh so true!

  12. A better analogy would the Olympic boxing tournament.

    Some years back a well intentioned committee decided that hitting heads was a nasty business that could harm the participants so they mandated the wearing of headguards.

    Unfortunately, whilst cushioning blows the headguards also reduce peripheral vision so the participants are being hit more now than ever before.

    It was also decided that judges couldn’t be trusted to judge so a points scoring system was introduced where a point is added to the competitors total if three judges agree and press their hand-held buttons simultaneously.

    Unfortunately the classy boxers who throw effective combinations are denied points because the judges cannot press quickly enough .

    Perhaps Mr Wheatley should spend time considering the residual effects of what regulators believe to be sound decisions.

  13. An interesting analogy this is, but is it all spin.

    I cannot see due to having spin my wheels fast enough to keep up with the constant information that bombards the media from sources such as the FCA etc.

    Oh well back to the normality of report writing.

  14. You’re wise until you speak and Mr. Wheatley would do well to remember that. He’s starting to come across as a bit of a Wally and that can’t be good for any of us. Soundbites without substance just confuse everybody and it’s starting to confuse me why this guy got the job he has?

  15. Today I have been researching a new “opportunity” which is basically a long-con scam that has been operated mainly in the US for some while. Well it appears that there are at least 3 versions of it being marketed in the UK and doubless it will take some tens of millions off individuals and small businesses. I’ve found them all today using google and a few other publicly available tools.

    These companies have been at it for between four months and eighteen months and, hey, do you know what? I’m hearing that retard Wheatley dribbling on, doubless trying to get a bit of reflected glory, about how he’s like the TDF. Clearly, he prefers the sound of his own voice than the quiet efficiency of his organisation doing the job its supposed to do. Sadly, its the same old, same old.

  16. “Prizes are like bonuses and rival teams provide incentives to compete, including the possibility of better-paid jobs”
    Yes a bit like the banks providing incentives to regulators to move on, even when those same regulators pick up a big fat bonus for probably just turning up to work or in some cases not even that.
    Advisers could learn a lot from Turkey or Egypt, when they finally use the straw which breaks the camels back, rise up against them and claim back your rights.

  17. In the same article wheately said
    “It may be interesting to consider whether there is a role for a statutory regulator in co-ordinating an ethical initiative”
    We have already had that mr regulator.It was called TCF. It did not work because those who were already doing it continued to do so, whilst those who were not, pretended they were whilst continuing not to.
    The FCA will aim to keep their own vast empire growing by continually introducinging first one initiative and then another one.
    Why not just lay down the rules clearly, fairly, transparently and not ambiguously or misleading?
    Outline the penalty for breaking the rules with the law being used for criminal activity?
    Because the FCA would not be able to claim a bigger and bigger remit with larger and larger payments and bonus payments.

  18. It sure feels like the Tour de France , peddling up hill while towing an anchor , that’s what your regulatory regime is like.

  19. RegulatorSaurusRex 23rd July 2013 at 9:54 am

    No wonder I’m extinct, I’ve lost my marbles.

  20. And with remarks like this, perhaps many of the FCA/FSA senior staff past & present should also get on their bikes…

  21. As a former racing cyclist and IFA I now have lots of time to go riding since RDR stopped me earning my living. Come to think of it I could do Mr Wheatley’s job at the FCA for half his pay and no pension knowing I couldn’t do much worse! I would fit all kinds of monitors to advisers bodies when they are out gining advice just to ensure they are doing it right!

  22. The FCA is very like the Tour De France. The only difference is that it doesn’t take nearly three weeks of sitting on a very uncomfortable seat to develop the same pain in the backside that they can produce with no effort at all!

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